Stock Market Update

The S&P 500 futures currently trade 30 points above fair value. 

Equity indices in the Asia-Pacific region ended the midweek session on a higher note. There was some speculation that President Trump and China's President Xi will discuss reducing tariffs on agriculture and energy products when they meet next week. The Chinese delegation will reportedly include multiple CEOs and NVIDIA CEO Huang will take part in the State Dinner. Japan's Prime Minister Takaichi confirmed that she will make changes to her cabinet tomorrow, but key officials are expected to maintain their posts. Hong Kong released its first five-year plan, expecting "opportunities and challenges" during that period.

• In economic data:
  • Japan's August trade deficit totaled JPY840 billion (expected deficit of JPY1.00 trillion; last deficit of JPY680 billion).
  • Japan's August imports increased 28.0% yr/yr (expected 26.3%; last 27.9%).
  • Japan's August exports increased 19.3% yr/yr (expected 18.2%; last 23.2%).
  • Japan's July core machinery orders fell 3.7% m/m (expected -1.2%; last 9.7%) and increased 11.2% yr/yr (expected 15.3%; last 16.9%).
  • Australia's August MI Leading Index was unchanged (last 0.0%).
  • New Zealand's Q3 Westpac Consumer Sentiment rose to 89.5 from 80.4.
  • New Zealand's Q2 current account deficit narrowed to 3.2% of GDP from 3.6% of GDP.

---Equity Markets---

• Japan's Nikkei: +0.7%
• Hong Kong's Hang Seng: +0.2%
• China's Shanghai Composite: +0.7%
• India's Sensex: +0.5%
• South Korea's Kospi: +1.4%
• Australia's ASX All Ordinaries: +0.3%

Major European indices trade in the green. The U.K.'s CPI accelerated for the second month in a row, rising to 3.1% yr/yr, while core CPI remained at 2.6% yr/yr for the fourth month in a row. The Bank of England is not expected to announce a rate hike tomorrow, but the market is looking for an announcement that the central bank will stop active sales of 20- and 30-yr Gilts. British homebuilders outperform after upbeat results from Barratt Redrow. European Commission President von der Leyen called on member states to admit Canada as an associate member.

• In economic data:
  • Eurozone July industrial production fell 0.1% m/m (expected -0.2%; last -0.1%) and was unchanged yr/yr (expected -0.3%; last -0.3%).
  • Eurozone Q2 wages increased 3.0% yr/yr (last 3.4%).
  • The Eurozone Q2 Labor Cost Index increased 3.1% yr/yr (expected 3.0%; last 3.2%).
  • U.K. August CPI increased 0.5% m/m, as expected (last 0.3%), and 3.1% yr/yr, as expected (last 2.9%).
  • U.K. August core CPI increased 0.3% m/m, as expected (last 0.2%), and 2.6% yr/yr, as expected (last 2.6%).
  • U.K. August input PPI increased 0.3% m/m (expected 0.6%; last -0.8%).
  • U.K. August output PPI increased 0.3% m/m (last 0.5%).
  • The U.K. August House Price Index increased 1.4% yr/yr (expected 2.1%; last 2.0%).
  • Italy's August CPI increased 0.5% m/m, as expected (last 0.3%), and 3.3% yr/yr, as expected (last 2.9%).

---Equity Markets---

• STOXX Europe 600: +0.6%
• Germany's DAX: +0.3%
• U.K.'s FTSE 100: +0.6%
• France's CAC 40: +0.6%
• Italy's FTSE MIB: +0.8%
• Spain's IBEX 35: +0.5%